Relevant amendments to the Mexican Copyright Law regarding private copy levy

May 12, 2020

The Mexican Congress is currently analyzing a bill to amend the Mexican Copyright Law (“LFDA” by its Spanish acronym), setting a levy as compensatory remuneration for private copying.

In general terms, private copying is any reproduction of artworks of lawful origin, made without any intention of profit and for personal and private use. Private copying is a limitation to economic rights, conforming section 148, subsection IV of the LFDA.

The bill was presented before the Congress by Sergio Mayer Breton, President of the Commission of Culture and Cinematography, with other members of said Commission. It proposes various amendments to the LFDA. In essence, the most important points are as follows:

1. The holders of the economic copyright and related rights shall be entitled to seek compensatory remuneration for the copying or reproduction of their works and performances, in any medium that has been made in accordance with the limitations provided for in Articles 148 and 151 of the LFDA.
2. The manufacturers that sell in national territory or importers of devices, technical instruments or equipment (including smart devices), who allow the reproduction of any type of work protected by law, shall be required to pay the levy by virtue of private copying. The distributors and sellers of equipment, technical instruments or devices to final users, shall be jointly liable to pay the levy provided for in the bill to the duly authorized collective management societies;

III. The payment of compensatory remuneration shall cover solely and exclusively the reproduction of artworks of lawful origin, made without any intention of profit and for personal and private use.

1. The payment of the levy shall be enforceable form the moment the devices, technical instruments or equipment enter the national market, by virtue of importation or by manufacture.
2. Payments to the holders of economic copyrights shall be made through the duly authorized collective management societies under the terms of the LFDA.
3. The National Copyright Institute (“INDAUTOR”, by its Spanish acronym) shall, in accordance with section 212 Bis of the LFDA, determine the equipment, technical instruments or devices to be subject to payment of compensatory remuneration, the amounts that the manufacturers, distributors, sellers or importers shall pay and the percentages to be distributed. The amounts shall be reviewed every two years.

In order to establish the levy, INDAUTOR will need to take into consideration the following parameters:

1. a) The frequency of use of the devices, technical instruments or equipment, for which the estimate of the number of works copied under the legal limit of private copy will be taken into account.
2. b) The storage capacity, as well as the importance of the reproduction function with respect to the rest of the functions of the devices, technical instruments or equipment.
3. c) The ratio of the devices, technical instruments or equipment and media to the average final price to the public.
4. d) International usage and customs.

VII. The bill clarifies that the amendments proposed may in no case be interpreted as validating or authorizing the reproduction, distribution, making available or communication to the public of artworks or artistic performances. In no case shall payment of the compensatory remuneration for copying for personal use imply any assignment or transfer of economic rights in favor of the manufacturers, distributors, sellers or importer to pay, nor shall it establish a license for the reproduction of artworks and performances protected by the LFDA

VIII. It is established that the acquisitions of devices, technical instruments or equipment are exempted from the payment the levy of compensatory remuneration, in the following cases:

1. Those carried out by the federal or local entities, as well as by the Congress, the Congress of the State, the federal judiciary and of each state for their operation;
2. Those carried out by legal entities acting as final consumers, which justify the exclusive professional use of the devices, technical instruments or equipment and provided that the latter have not been placed, at the disposal of private users and are clearly reserved for uses other than private copying, which need to be attested to in a certificate issued by INDAUTOR;
3. Those made by persons authorized by the respective collective management societies to reproduce artworks, and artistic performances, due to their business, which they shall prove by means of a certificate issued by the INDAUTOR;
4. Those made outside national territory while travelling.
5. In the event of invention or emergence of new devices, technical instruments or equipment’s that are not considered in the list set forth by INDAUTOR and are suitable for the reproduction or copying of any artistic works, performances and transmissions, INDAUTOR shall issue, at the express request of the collective management societies or of the party that is required to pay, the corresponding amounts.

If INDAUTOR does not issue the amounts payable referred to in the foregoing paragraph, they shall self-determine the amount and pay the relevant collective management societies an equivalent to the ones listed, taking into account its technical and market characteristics.

The self-determination referred to in the foregoing paragraph shall be notified in writing to the INDAUTOR within a period not exceeding 30 days, following the introduction into the national market of the device, technical instrument or equipment.

1. The distribution of the compensatory remuneration established will be carried out as follows:
2. Audio: 50% to author of musical work with or without lyrics, 25% to the producer of the sound recordings, and 25% to the performers.
3. Video: 50% to authors who in turn are subdivided into: 20% literary, 15% musical with or without lyrics, 10% director, 2.5% to interpreters and 2.5% to painters, sculptors and photographers: 24% to audiovisual and film producers; 1% to phonogram producer; and 25% to performers.

III. Image: 33.33% to photographers, 33.33% to painters, 33.33% to sculptors and plastic artists.

1. Text: 47% writers, 47% publishers, 1.7% photographers, 1.7% painters or drawers, 1% sculptors and plastic artists, 0.8% cartoonists and 0.8% caricaturists.
2. Manufacturers, distributors, sellers or importers of devices, technical instruments or equipment who do not pay compensatory remuneration may be fined between 5,000 and 40,000 days of the applicable minimum wage.

This bill was presented on April 21^st, 2020 and must comply with the complete legislative process, it is currently pending the outcome of the advisory opinion, however, it is important to note that the bill has full support of the Commission of Culture and Cinematography.

OLIVARES partners and associates will actively participate in the monitoring and follow-up of the legislative process of this bill and we will continue to provide updates and reports on the progress that may arise.